Private Investor: In search of a growth engine? Just Google it

One of the joys of the new technologies and the liberalisation of retail financial markets is that buying stocks in faraway places is easier – and cheaper – than ever.

For not very much more than you pay to transact business on a company with its primary listing in London, you can now explore the further reaches of equity investment in the United States and Europe.

Take a look at a few on-line brokers' websites to see what I mean. Such are the low fees involved (even less if you take advantage of any of the introductory offers) that the world, so far as investment is concerned, is your oyster.

A little over 20 years ago, before the "Big Bang" reforms in the City and then the internet, buying shares on one of the New York exchanges would have required an investment of some tens of thousands to make it worthwhile – plus a brokerage account at one of the few given a licence to undertake such business. Now the stake is far lower, and you need never speak to a broker.

Symbolically, then, you could follow my lead and buy some shares in chronically undervalued American stocks. Now, the Fed's rate cuts have ensured that they're not quite as cheap as they were, but the US dollar is still a structurally weak currency. Structurally – but not permanently.

I say you can "symbolically" follow the lead, because the US shares that I think are worth picking up are those in Google.

I noticed, as you may have, the headlines this week about Google bursting through the $600 per share mark. In one sense that's nothing to get too excited about, because American stocks are usually "heavy" – that is, that per share they come in at a substantial price tag – but it was an interesting moment.

I mention Google also because I can't see that there is another stock around that combines the great qualities of ubiquity and profitability. Google is used – I don't know – millions of times per second, probably.

By rights, it shouldn't be this way. The internet is a medium where barriers to entry are relatively low – a nightmare for investors.

Once, giant chemical concerns and auto giants could comfort themselves with the notion that at least one competitive edge they could command was their sheer size. Few, if any, new entrants could hope to match the expense of their capital equipment; their distribution networks were similarly hard to replicate from scratch; and the power of the brands could insulate them from interlopers. But all you need to get on the web is a good idea, some software and an internet service provider – no?

So Google "ought" to be one of hundreds of search engines all vying for your attention and exploring new business avenues in a teeming ecology of web enterprise. Yet it isn't. It's just sitting there as the default search engine for almost everyone. Like Hoover, it has become a generic. Maybe that's because the web seems inclined to award its best players a monopoly.

The question, of course, is how long that can last, and I'm afraid I can't offer you anything more than a hunch on that, which is a positive one. My guess is that, one day, someone will indeed come along and usurp Google, just as it usurped others in its time. Yet, for the moment, there doesn't seem to be any sign of that, and people seem inclined to stick with it.

That's immensely powerful, because Google also seems to have cracked the problem of making money on the web, with its carefully and subtly segregated commercial and non-commercial hit lists.

I haven't much idea, to be honest, about the various experiments Google is conducting in other areas. But the fundamental core search-engine business seems to be more soundly based than ever.

When you have a brand this strong in a medium so competitive, then you can only conclude that the company's doing something right. With the dollar so low, too, it's still cheap in pound terms. Look it up on Google if you don't believe me.

s.ogrady@independent.co.uk

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